The Supreme Court on Monday refused to quash the Allahabad High Court’s order last year upholding the UP government’s competence to waive the interest payable to cane growers by sugarcane factories for delayed payment of arrears.

A bench led by justice Ranjan Gogoi upheld the UP government’s decision to waive the interest on the ground that even though sugarcane falls in the concurrent list, both the state and the Central government legislations would operate simultaneously. (Reuters)

The Supreme Court on Monday refused to quash the Allahabad High Court’s order last year upholding the UP government’s competence to waive the interest payable to cane growers by sugarcane factories for delayed payment of arrears. A bench led by justice Ranjan Gogoi upheld the UP government’s decision to waive the interest on the ground that even though sugarcane falls in the concurrent list, both the state and the Central government legislations would operate simultaneously. Urging the court that farmers of the country were in “dire straits” and penal interest should be paid by mill owners to cane growers for the delay in payment of cane price for 2011-15, VM Singh, convener of the Rashtriya Kisan Mazdoor Sangathan, had challenged the power of the state to waive the interest. He argued that sugar mills take supplies of sugarcane from farmers in terms of the statutory provisions which mandate payment of cane dues within 14 days.

However, these mills take months and years to clear farmers’ dues or even refuse to do so, thus making it difficult for farmers to pay interest and penalties on late payment of their loans taken to raise the cane, he said in his petition. According to Singh, non-payment of cane price is a regular issue, which brings misery to more than 4-5 million sugarcane farmers in UP and around 30-40 million across the country.

The HC, while upholding the state’s right to waive interest, had set aside the order passed by the UP government whereby it had waived the interest of around Rs 2,000 crore payable to cane growers by sugarcane factories for delayed payment for 2012-13, 2013-14 and 2014-15. The HC had said the waiver was without application of mind as the committee set up to look into the issue only considered the viewpoints of mill owners and the report was one sided, having failed to consider the farmers’ perspective.

It also gave four months time to the cane commissioner to take a fresh decision after keeping the farmers’ interest in mind. However, no decision had been taken as on date, Singh said. The interest amount for 2012-13 and 2013-14 of more than Rs 1,300 crore was waived by the state government on May 22, 2015 by accepting the request of mill owners that they were not in a position to pay interest for delay in payment of cane price to farmers as they incurred losses allegedly on reduction in sugar prices. The state government, through an order in October 2016, had further waived more than Rs 700 crore for interest payment.